POTUS His Excellency Donald J. Trump 2019 State of the Union Address


February 6, 2019

POTUS His Excellency Donald J. Trump 2019 State of the Union Address

 

President Donald Trump delivered his 2019 State of the Union address on Tuesday. Read the President’s speech as prepared for delivery and released by the White House.

 

Madam Speaker, Mr. Vice President, Members of Congress, the First Lady of the United States, and my fellow Americans:
We meet tonight at a moment of unlimited potential. As we begin a new Congress, I stand here ready to work with you to achieve historic breakthroughs for all Americans.
Millions of our fellow citizens are watching us now, gathered in this great chamber, hoping that we will govern not as two parties but as one Nation.
The agenda I will lay out this evening is not a Republican agenda or a Democrat agenda. It is the agenda of the American people.
Many of us campaigned on the same core promises: to defend American jobs and demand fair trade for American workers; to rebuild and revitalize our Nation’s infrastructure; to reduce the price of healthcare and prescription drugs; to create an immigration system that is safe, lawful, modern and secure; and to pursue a foreign policy that puts America’s interests first.
There is a new opportunity in American politics, if only we have the courage to seize it. Victory is not winning for our party. Victory is winning for our country.
This year, America will recognize two important anniversaries that show us the majesty of America’s mission, and the power of American pride.
In June, we mark 75 years since the start of what General Dwight D. Eisenhower called the Great Crusade — the Allied liberation of Europe in World War II. On D-Day, June 6, 1944, 15,000 young American men jumped from the sky, and 60,000 more stormed in from the sea, to save our civilization from tyranny. Here with us tonight are three of those heroes: Private First Class Joseph Reilly, Staff Sergeant Irving Locker, and Sergeant Herman Zeitchik. Gentlemen, we salute you.
In 2019, we also celebrate 50 years since brave young pilots flew a quarter of a million miles through space to plant the American flag on the face of the moon. Half a century later, we are joined by one of the Apollo 11 astronauts who planted that flag: Buzz Aldrin. This year, American astronauts will go back to space on American rockets.
In the 20th century, America saved freedom, transformed science, and redefined the middle class standard of living for the entire world to see. Now, we must step boldly and bravely into the next chapter of this great American adventure, and we must create a new standard of living for the 21st century. An amazing quality of life for all of our citizens is within our reach.
We can make our communities safer, our families stronger, our culture richer, our faith deeper, and our middle class bigger and more prosperous than ever before.
But we must reject the politics of revenge, resistance, and retribution — and embrace the boundless potential of cooperation, compromise, and the common good.
Together, we can break decades of political stalemate. We can bridge old divisions, heal old wounds, build new coalitions, forge new solutions, and unlock the extraordinary promise of America’s future. The decision is ours to make.
We must choose between greatness or gridlock, results or resistance,vision or vengeance, incredible progress or pointless destruction.
Tonight, I ask you to choose greatness.
Over the last 2 years, my Administration has moved with urgency and historic speed to confront problems neglected by leaders of both parties over many decades.
In just over 2 years since the election, we have launched an unprecedented economic boom — a boom that has rarely been seen before. We have created 5.3 million new jobs and importantly added 600,000 new manufacturing jobs — something which almost everyone said was impossible to do, but the fact is, we are just getting started.
Wages are rising at the fastest pace in decades, and growing for blue collar workers, who I promised to fight for, faster than anyone else. Nearly 5 million Americans have been lifted off food stamps. The United States economy is growing almost twice as fast today as when I took office, and we are considered far and away the hottest economy anywhere in the world. Unemployment has reached the lowest rate in half a century. African-American, Hispanic-American and Asian-American unemployment have all reached their lowest levels ever recorded. Unemployment for Americans with disabilities has also reached an all-time low. More people are working now than at any time in our history — 157 million.
We passed a massive tax cut for working families and doubled the child tax credit.We virtually ended the estate, or death, tax on small businesses, ranches, and family farms.
We eliminated the very unpopular Obamacare individual mandate penalty — and to give critically ill patients access to life-saving cures, we passed right to try.
My Administration has cut more regulations in a short time than any other administration during its entire tenure. Companies are coming back to our country in large numbers thanks to historic reductions in taxes and regulations.
We have unleashed a revolution in American energy — the United States is now the number one producer of oil and natural gas in the world. And now, for the first time in 65 years, we are a net exporter of energy.
After 24 months of rapid progress, our economy is the envy of the world, our military is the most powerful on earth, and America is winning each and every day. Members of Congress: the State of our Union is strong. Our country is vibrant and our economy is thriving like never before.
On Friday, it was announced that we added another 304,000 jobs last month alone — almost double what was expected. An economic miracle is taking place in the United States — and the only thing that can stop it are foolish wars, politics, or ridiculous partisan investigations.
If there is going to be peace and legislation, there cannot be war and investigation. It just doesn’t work that way!
We must be united at home to defeat our adversaries abroad. This new era of cooperation can start with finally confirming the more than 300 highly qualified nominees who are still stuck in the Senate — some after years of waiting. The Senate has failed to act on these nominations, which is unfair to the nominees and to our country.
Now is the time for bipartisan action. Believe it or not, we have already proven that it is possible.
In the last Congress, both parties came together to pass unprecedented legislation to confront the opioid crisis, a sweeping new Farm Bill, historic VA reforms, and after four decades of rejection, we passed VA Accountability so we can finally terminate those who mistreat our wonderful veterans.
And just weeks ago, both parties united for groundbreaking criminal justice reform. Last year, I heard through friends the story of Alice Johnson. I was deeply moved. In 1997, Alice was sentenced to life in prison as a first-time non-violent drug offender. Over the next two decades, she became a prison minister, inspiring others to choose a better path. She had a big impact on that prison population — and far beyond.
Alice’s story underscores the disparities and unfairness that can exist in criminal sentencing — and the need to remedy this injustice. She served almost 22 years and had expected to be in prison for the rest of her life.
In June, I commuted Alice’s sentence — and she is here with us tonight. Alice, thank you for reminding us that we always have the power to shape our own destiny.
When I saw Alice’s beautiful family greet her at the prison gates, hugging and kissing and crying and laughing, I knew I did the right thing.
Inspired by stories like Alice’s, my Administration worked closely with members of both parties to sign the First Step Act into law. This legislation reformed sentencing laws that have wrongly and disproportionately harmed the African-American community. The First Step Act gives non-violent offenders the chance to re-enter society as productive, law-abiding citizens. Now, States across the country are following our lead. America is a Nation that believes in redemption.
We are also joined tonight by Matthew Charles from Tennessee. In 1996, at age 30, Matthew was sentenced to 35 years for selling drugs and related offenses. Over the next two decades, he completed more than 30 Bible studies, became a law clerk, and mentored fellow inmates. Now, Matthew is the very first person to be released from prison under the First Step Act. Matthew, on behalf of all Americans: welcome home.
As we have seen, when we are united, we can make astonishing strides for our country. Now, Republicans and Democrats must join forces again to confront an urgent national crisis.
The Congress has 10 days left to pass a bill that will fund our Government, protect our homeland, and secure our southern border.
Now is the time for the Congress to show the world that America is committed to ending illegal immigration and putting the ruthless coyotes, cartels, drug dealers, and human traffickers out of business.
As we speak, large, organized caravans are on the march to the United States. We have just heard that Mexican cities, in order to remove the illegal immigrants from their communities, are getting trucks and buses to bring them up to our country in areas where there is little border protection. I have ordered another 3,750 troops to our southern border to prepare for the tremendous onslaught.
This is a moral issue. The lawless state of our southern border is a threat to the safety, security, and financial well‑being of all Americans. We have a moral duty to create an immigration system that protects the lives and jobs of our citizens. This includes our obligation to the millions of immigrants living here today, who followed the rules and respected our laws. Legal immigrants enrich our Nation and strengthen our society in countless ways. I want people to come into our country, but they have to come in legally.
Tonight, I am asking you to defend our very dangerous southern border out of love and devotion to our fellow citizens and to our country.
No issue better illustrates the divide between America’s working class and America’s political class than illegal immigration. Wealthy politicians and donors push for open borders while living their lives behind walls and gates and guards.
Meanwhile, working class Americans are left to pay the price for mass illegal migration — reduced jobs, lower wages, overburdened schools and hospitals, increased crime, and a depleted social safety net.
Tolerance for illegal immigration is not compassionate — it is cruel. One in three women is sexually assaulted on the long journey north. Smugglers use migrant children as human pawns to exploit our laws and gain access to our country.
Human traffickers and sex traffickers take advantage of the wide open areas between our ports of entry to smuggle thousands of young girls and women into the United States and to sell them into prostitution and modern-day slavery.
Tens of thousands of innocent Americans are killed by lethal drugs that cross our border and flood into our cities — including meth, heroin, cocaine, and fentanyl.
The savage gang, MS-13, now operates in 20 different American States, and they almost all come through our southern border. Just yesterday, an MS-13 gang member was taken into custody for a fatal shooting on a subway platform in New York City. We are removing these gang members by the thousands, but until we secure our border they’re going to keep streaming back in. Year after year, countless Americans are murdered by criminal illegal aliens. I’ve gotten to know many wonderful Angel Moms, Dads, and families — no one should ever have to suffer the horrible heartache they have endured.
Here tonight is Debra Bissell. Just three weeks ago, Debra’s parents, Gerald and Sharon, were burglarized and shot to death in their Reno, Nevada, home by an illegal alien. They were in their eighties and are survived by four children, 11 grandchildren, and 20 great-grandchildren. Also here tonight are Gerald and Sharon’s granddaughter, Heather, and great‑granddaughter, Madison.
To Debra, Heather, Madison, please stand: few can understand your pain. But I will never forget, and I will fight for the memory of Gerald and Sharon, that it should never happen again. Not one more American life should be lost because our Nation failed to control its very dangerous border.
In the last 2 years, our brave ICE officers made 266,000 arrests of criminal aliens, including those charged or convicted of nearly 100,000 assaults, 30,000 sex crimes, and 4,000 killings.
We are joined tonight by one of those law enforcement heroes: ICE Special Agent Elvin Hernandez. When Elvin was a boy, he and his family legally immigrated to the United States from the Dominican Republic. At the age of eight, Elvin told his dad he wanted to become a Special Agent.
Today, he leads investigations into the scourge of international sex trafficking. Elvin says: “If I can make sure these young girls get their justice, I’ve done my job.” Thanks to his work and that of his colleagues, more than 300 women and girls have been rescued from horror and more than 1,500 sadistic traffickers have been put behind bars in the last year.
Special Agent Hernandez, please stand: We will always support the brave men and women of Law Enforcement — and I pledge to you tonight that we will never abolish our heroes from ICE.
My Administration has sent to the Congress a commonsense proposal to end the crisis on our southern border.
It includes humanitarian assistance, more law enforcement, drug detection at our ports, closing loopholes that enable child smuggling, and plans for a new physical barrier, or wall, to secure the vast areas between our ports of entry. In the past, most of the people in this room voted for a wall — but the proper wall never got built. I’ll get it built.
This is a smart, strategic, see-through steel barrier — not just a simple concrete wall. It will be deployed in the areas identified by border agents as having the greatest need, and as these agents will tell you, where walls go up, illegal crossings go way down.
San Diego used to have the most illegal border crossings in the country. In response, and at the request of San Diego residents and political leaders, a strong security wall was put in place. This powerful barrier almost completely ended illegal crossings.
The border city of El Paso, Texas, used to have extremely high rates of violent crime — one of the highest in the country, and considered one of our Nation’s most dangerous cities. Now, with a powerful barrier in place, El Paso is one of our safest cities.
Simply put, walls work and walls save lives. So let’s work together, compromise, and reach a deal that will truly make America safe.
As we work to defend our people’s safety, we must also ensure our economic resurgence continues at a rapid pace.
No one has benefited more from our thriving economy than women, who have filled 58 percent of the new jobs created in the last year. All Americans can be proud that we have more women in the workforce than ever before — and exactly one century after the Congress passed the Constitutional amendment giving women the right to vote, we also have more women serving in the Congress than ever before.
As part of our commitment to improving opportunity for women everywhere, this Thursday we are launching the first ever Government-wide initiative focused on economic empowerment for women in developing countries
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To build on our incredible economic success, one priority is paramount — reversing decades of calamitous trade policies.
We are now making it clear to China that after years of targeting our industries, and stealing our intellectual property, the theft of American jobs and wealth has come to an end.
Therefore, we recently imposed tariffs on $250 billion of Chinese goods — and now our Treasury is receiving billions of dollars a month from a country that never gave us a dime. But I don’t blame China for taking advantage of us — I blame our leaders and representatives for allowing this travesty to happen. I have great respect for President Xi, and we are now working on a new trade deal with China. But it must include real, structural change to end unfair trade practices, reduce our chronic trade deficit, and protect American jobs.
Another historic trade blunder was the catastrophe known as NAFTA.
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I have met the men and women of Michigan, Ohio, Pennsylvania, Indiana, New Hampshire, and many other States whose dreams were shattered by NAFTA. For years, politicians promised them they would negotiate for a better deal. But no one ever tried — until now.
Our new U.S.-Mexico-Canada Agreement — or USMCA — will replace NAFTA and deliver for American workers: bringing back our manufacturing jobs, expanding American agriculture, protecting intellectual property, and ensuring that more cars are proudly stamped with four beautiful words: made in the USA.
Tonight, I am also asking you to pass the United States Reciprocal Trade Act, so that if another country places an unfair tariff on an American product, we can charge them the exact same tariff on the same product that they sell to us.
Both parties should be able to unite for a great rebuilding of America’s crumbling infrastructure.
I know that the Congress is eager to pass an infrastructure bill — and I am eager to work with you on legislation to deliver new and important infrastructure investment, including investments in the cutting edge industries of the future. This is not an option. This is a necessity.
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The next major priority for me, and for all of us, should be to lower the cost of healthcare and prescription drugs — and to protect patients with pre-existing conditions.
Already, as a result of my Administration’s efforts, in 2018 drug prices experienced their single largest decline in 46 years.
But we must do more. It is unacceptable that Americans pay vastly more than people in other countries for the exact same drugs, often made in the exact same place. This is wrong, unfair, and together we can stop it.
I am asking the Congress to pass legislation that finally takes on the problem of global freeloading and delivers fairness and price transparency for American patients. We should also require drug companies, insurance companies, and hospitals to disclose real prices to foster competition and bring costs down.
No force in history has done more to advance the human condition than American freedom. In recent years we have made remarkable progress in the fight against HIV and AIDS. Scientific breakthroughs have brought a once-distant dream within reach. My budget will ask Democrats and Republicans to make the needed commitment to eliminate the HIV epidemic in the United States within 10 years. Together, we will defeat AIDS in America.
Tonight, I am also asking you to join me in another fight that all Americans can get behind: the fight against childhood cancer.
Joining Melania in the gallery this evening is a very brave 10-year-old girl, Grace Eline. Every birthday since she was 4, Grace asked her friends to donate to St. Jude Children’s Research Hospital. She did not know that one day she might be a patient herself. Last year, Grace was diagnosed with brain cancer. Immediately, she began radiation treatment. At the same time, she rallied her community and raised more than $40,000 for the fight against cancer. When Grace completed treatment last fall, her doctors and nurses cheered with tears in their eyes as she hung up a poster that read: “Last Day of Chemo.” Grace — you are an inspiration to us all.
Many childhood cancers have not seen new therapies in decades. My budget will ask the Congress for $500 million over the next 10 years to fund this critical life-saving research.
To help support working parents, the time has come to pass school choice for America’s children. I am also proud to be the first President to include in my budget a plan for nationwide paid family leave — so that every new parent has the chance to bond with their newborn child.
There could be no greater contrast to the beautiful image of a mother holding her infant child than the chilling displays our Nation saw in recent days. Lawmakers in New York cheered with delight upon the passage of legislation that would allow a baby to be ripped from the mother’s womb moments before birth. These are living, feeling, beautiful babies who will never get the chance to share their love and dreams with the world. And then, we had the case of the Governor of Virginia where he basically stated he would execute a baby after birth.
To defend the dignity of every person, I am asking the Congress to pass legislation to prohibit the late-term abortion of children who can feel pain in the mother’s womb.
Let us work together to build a culture that cherishes innocent life. And let us reaffirm a fundamental truth: all children — born and unborn — are made in the holy image of God.
The final part of my agenda is to protect America’s National Security. Over the last 2 years, we have begun to fully rebuild the United States Military — with $700 billion last year and $716 billion this year. We are also getting other nations to pay their fair share. For years, the United States was being treated very unfairly by NATO — but now we have secured a $100 billion increase in defense spending from NATO allies.
As part of our military build-up, the United States is developing a state-of-the-art Missile Defense System.
Under my Administration, we will never apologize for advancing America’s interests.
For example, decades ago the United States entered into a treaty with Russia in which we agreed to limit and reduce our missile capabilities. While we followed the agreement to the letter, Russia repeatedly violated its terms. That is why I announced that the United States is officially withdrawing from the Intermediate-Range Nuclear Forces Treaty, or INF Treaty.
Perhaps we can negotiate a different agreement, adding China and others, or perhaps we can’t — in which case, we will outspend and out-innovate all others by far.
As part of a bold new diplomacy, we continue our historic push for peace on the Korean Peninsula. Our hostages have come home, nuclear testing has stopped, and there has not been a missile launch in 15 months. If I had not been elected President of the United States, we would right now, in my opinion, be in a major war with North Korea with potentially millions of people killed. Much work remains to be done, but my relationship with Kim Jong Un is a good one. And Chairman Kim and I will meet again on February 27 and 28 in Vietnam.
Two weeks ago, the United States officially recognized the legitimate government of Venezuela, and its new interim President, Juan Guaido.
We stand with the Venezuelan people in their noble quest for freedom — and we condemn the brutality of the Maduro regime, whose socialist policies have turned that nation from being the wealthiest in South America into a state of abject poverty and despair.
Here, in the United States, we are alarmed by new calls to adopt socialism in our country. America was founded on liberty and independence — not government coercion, domination, and control. We are born free, and we will stay free. Tonight, we renew our resolve that America will never be a socialist country.
One of the most complex set of challenges we face is in the Middle East.
Our approach is based on principled realism — not discredited theories that have failed for decades to yield progress. For this reason, my Administration recognized the true capital of Israel — and proudly opened the American Embassy in Jerusalem.
Our brave troops have now been fighting in the Middle East for almost 19 years. In Afghanistan and Iraq, nearly 7,000 American heroes have given their lives. More than 52,000 Americans have been badly wounded. We have spent more than $7 trillion in the Middle East.
As a candidate for President, I pledged a new approach. Great nations do not fight endless wars. When I took office, ISIS controlled more than 20,000 square miles in Iraq and Syria. Today, we have liberated virtually all of that territory from the grip of these bloodthirsty killers.
Now, as we work with our allies to destroy the remnants of ISIS, it is time to give our brave warriors in Syria a warm welcome home.
I have also accelerated our negotiations to reach a political settlement in Afghanistan. Our troops have fought with unmatched valor — and thanks to their bravery, we are now able to pursue a political solution to this long and bloody conflict.
In Afghanistan, my Administration is holding constructive talks with a number of Afghan groups, including the Taliban. As we make progress in these negotiations, we will be able to reduce our troop presence and focus on counter-terrorism. We do not know whether we will achieve an agreement — but we do know that after two decades of war, the hour has come to at least try for peace.
Above all, friend and foe alike must never doubt this Nation’s power and will to defend our people. Eighteen years ago, terrorists attacked the USS Cole — and last month American forces killed one of the leaders of the attack.
We are honored to be joined tonight by Tom Wibberley, whose son, Navy Seaman Craig Wibberley, was one of the 17 sailors we tragically lost. Tom: we vow to always remember the heroes of the USS Cole.
My Administration has acted decisively to confront the world’s leading state sponsor of terror: the radical regime in Iran.
To ensure this corrupt dictatorship never acquires nuclear weapons, I withdrew the United States from the disastrous Iran nuclear deal. And last fall, we put in place the toughest sanctions ever imposed on a country.
We will not avert our eyes from a regime that chants death to America and threatens genocide against the Jewish people. We must never ignore the vile poison of anti-Semitism, or those who spread its venomous creed. With one voice, we must confront this hatred anywhere and everywhere it occurs.
Just months ago, 11 Jewish-Americans were viciously murdered in an anti-semitic attack on the Tree of Life Synagogue in Pittsburgh. SWAT Officer Timothy Matson raced into the gunfire and was shot seven times chasing down the killer. Timothy has just had his 12th surgery — but he made the trip to be here with us tonight. Officer Matson: we are forever grateful for your courage in the face of evil.
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Tonight, we are also joined by Pittsburgh survivor Judah Samet. He arrived at the synagogue as the massacre began. But not only did Judah narrowly escape death last fall — more than seven decades ago, he narrowly survived the Nazi concentration camps. Today is Judah’s 81st birthday. Judah says he can still remember the exact moment, nearly 75 years ago, after 10 months in a concentration camp, when he and his family were put on a train, and told they were going to another camp. Suddenly the train screeched to a halt. A soldier appeared. Judah’s family braced for the worst. Then, his father cried out with joy: “It’s the Americans.”
A second Holocaust survivor who is here tonight, Joshua Kaufman, was a prisoner at Dachau Concentration Camp. He remembers watching through a hole in the wall of a cattle car as American soldiers rolled in with tanks. “To me,” Joshua recalls, “the American soldiers were proof that God exists, and they came down from the sky.”
I began this evening by honoring three soldiers who fought on D-Day in the Second World War. One of them was Herman Zeitchik. But there is more to Herman’s story. A year after he stormed the beaches of Normandy, Herman was one of those American soldiers who helped liberate Dachau. He was one of the Americans who helped rescue Joshua from that hell on earth. Almost 75 years later, Herman and Joshua are both together in the gallery tonight — seated side-by-side, here in the home of American freedom. Herman and Joshua: your presence this evening honors and uplifts our entire Nation.
When American soldiers set out beneath the dark skies over the English Channel in the early hours of D-Day, 1944, they were just young men of 18 and 19, hurtling on fragile landing craft toward the most momentous battle in the history of war.
They did not know if they would survive the hour. They did not know if they would grow old. But they knew that America had to prevail. Their cause was this Nation, and generations yet unborn.
Why did they do it? They did it for America — they did it for us. Everything that has come since — our triumph over communism, our giant leaps of science and discovery, our unrivaled progress toward equality and justice — all of it is possible thanks to the blood and tears and courage and vision of the Americans who came before.
Think of this Capitol — think of this very chamber, where lawmakers before you voted to end slavery, to build the railroads and the highways, to defeat fascism, to secure civil rights, to face down an evil empire.
Here tonight, we have legislators from across this magnificent republic. You have come from the rocky shores of Maine and the volcanic peaks of Hawaii; from the snowy woods of Wisconsin and the red deserts of Arizona; from the green farms of Kentucky and the golden beaches of California. Together, we represent the most extraordinary Nation in all of history.
What will we do with this moment? How will we be remembered? I ask the men and women of this Congress: Look at the opportunities before us! Our most thrilling achievements are still ahead. Our most exciting journeys still await. Our biggest victories are still to come. We have not yet begun to dream.
We must choose whether we are defined by our differences — or whether we dare to transcend them.
We must choose whether we will squander our inheritance — or whether we will proudly declare that we are Americans. We do the incredible. We defy the impossible. We conquer the unknown.
This is the time to re-ignite the American imagination. This is the time to search for the tallest summit, and set our sights on the brightest star. This is the time to rekindle the bonds of love and loyalty and memory that link us together as citizens, as neighbors, as patriots.
This is our future — our fate — and our choice to make. I am asking you to choose greatness. No matter the trials we face, no matter the challenges to come, we must go forward together.
We must keep America first in our hearts. We must keep freedom alive in our souls. And we must always keep faith in America’s destiny — that one Nation, under God, must be the hope and the promise and the light and the glory among all the nations of the world!

Thank you. God Bless You, God Bless America, and good night!

Trump vs. the Economy


 

Trump vs. the Economy

December 30, 2018  by

https://www.project-syndicate.org/commentary/trump-behavior-causes-stock-market-drop-by-nouriel-roubini-2018-12

Between publicly chastising US Federal Reserve Chair Jerome Powell and escalating his trade war with China, US President Donald Trump has finally rattled the markets. While investors were happy to look the other way during the first half of Trump’s term, the dangerous spectacle unfolding in the White House can no longer be ignored.

NEW YORK – Financial markets have finally awoken to the fact that Donald Trump is US president. Given that the world has endured two years of reckless tweets and public statements by the world’s most powerful man, the obvious question is, What took so long?

For one thing, until now, investors had bought into the argument that Trump is all bark and no bite. They were willing to give him the benefit of the doubt as long as he pursued tax cuts, deregulation, and other policies beneficial to the corporate sector and shareholders. And many trusted that, at the end of the day, the “adults in the room” would restrain Trump and ensure that the administration’s policies didn’t jump the guardrails of orthodoxy.

These assumptions were more or less vindicated during Trump’s first year in office, when economic growth and an expected increase in corporate profits – owing to forthcoming tax cuts and deregulation – resulted in strong stock-market performance. In 2017, US stock indices rose more than 20%.

But things changed radically in 2018, and especially in the last few months. Despite corporate earnings growing by over 20% (thanks to the tax cuts), US equity markets moved sideways for most of the year, and have now taken a sharp turn south. At this point, broad indices are in correction territory (meaning a 10% drop from the recent peak), and indices of tech stocks, such as the Nasdaq, are in bear-market territory (a drop of 20% or more).

Though financial markets’ higher volatility reflects concerns about China, Italy and other eurozone economies, and key emerging economies, most of the recent turmoil is due to Trump. The year started with the enactment of a reckless tax cut that pushed up long-term interest rates and created a sugar high in an economy already close to full employment. As early as February, growing concerns about inflation rising above the US Federal Reserve’s 2% target led to the year’s first risk-off.

Then came Trump’s trade wars with China and other key US trade partners. Market worries about the administration’s protectionist policies have waxed and waned throughout the year, but they are now reaching a new peak. The latest US actions against China seem to augur a broader trade, economic, and geopolitical cold war.

An additional worry is that Trump’s other policies will have stagflationary effects (reduced growth alongside higher inflation). After all, Trump is planning to limit inward foreign direct investment, and has already implemented broad restrictions on immigration, which will reduce labor-supply growth at a time when workforce aging and skills mismatches are already a growing problem.

Moreover, the administration has yet to propose an infrastructure plan to spur private-sector productivity or hasten the transition to a green economy. And on Twitter and elsewhere, Trump has continued to bash corporations for their hiring, production, investment, and pricing practices, singling out tech firms just when they are already facing a wider backlash and increased competition from their Chinese counterparts.

Emerging markets have also been shaken by US policies. Fiscal stimulus and monetary-policy tightening have pushed up short- and long-term interest rates and strengthened the US dollar. As a result, emerging economies have experienced capital flight and rising dollar-denominated debt. Those that rely heavily on exports have suffered the effects of lower commodity prices, and all that trade even indirectly with China have felt the effects of the trade war.

Even Trump’s oil policies have created volatility. After the resumption of US sanctions against Iran pushed up oil prices, the administration’s efforts to carve out exemptions and bully Saudi Arabia into increasing its own production led to a sharp price drop. Though US consumers benefit from lower oil prices, US energy firms’ stock prices do not. Besides, excessive oil-price volatility is bad for producers and consumers alike, because it hinders sensible investment and consumption decisions.

Making matters worse, it is now clear that the benefits of last year’s tax cuts have accrued almost entirely to the corporate sector, rather than to households in the form of higher real (inflation-adjusted) wages. That means household consumption could soon slow down, further undercutting the economy.

More than anything else, though, the sharp fall in US and global equities during the last quarter is a response to Trump’s own utterances and actions. Even worse than the heightened risk of a full-scale trade war with China (despite the recent “” agreed with Chinese President Xi Jinping) are Trump’s public attacks on the Fed, which began as early as the spring of 2018, when the US economy was growing at more than 4%.

Given these earlier attacks, markets were spooked this month when the Fed correctly decided to hike interest rates while also signaling a more gradual pace of rate increases in 2019. Most likely, the Fed’s relative hawkishness is a reaction to Trump’s threats against it. In the face of hostile presidential tweets, Fed Chair Jerome Powell needed to signal that the central bank remains politically independent.

But then came Trump’s decision to shut down large segments of the federal government over Congress’s refusal to fund his useless Mexican border wall. That sent markets into a near-panic, and the government shutdown was soon followed by reports that Trump wants to fire Powell – a move that could turn a correction into a crash. Just before the Christmas holiday, US Treasury secretary Steven Mnuchin was forced to issue a public statement to placate the markets. He announced that Trump was not planning to fire Powell after all, and that US banks’ finances are sound, effectively highlighting the question of whether they really are.

Recent changes within the administration that do not necessarily affect economic policy making are also rattling the markets. The impending departure of White House Chief of Staff John Kelly and Secretary of Defense James Mattis will leave the room devoid of adults. The coterie of economic nationalists and foreign-policy hawks who remain will cater to Trump’s every whim.

As matters stand, the risk of a full-scale geopolitical conflagration with China cannot be ruled out. A new cold war would effectively lead to de-globalization, disrupting supply chains everywhere, but particularly in the tech sector, as the recent ZTE and Huawei cases signal. At the same time, Trump seems to be hell-bent on undermining the cohesion of the European Union and NATO at a time when Europe is economically and politically fragile. And Special Counsel Robert Mueller’s investigation into Trump’s 2016 election campaign’s ties to Russia hangs like a Sword of Damocles over his presidency.

Trump is now the Dr. Strangelove of financial markets. Like the paranoid madman in Stanley Kubrick’s classic film, he is flirting with mutually assured economic destruction. Now that markets see the danger, the risk of a financial crisis and global recession has grown.

Nouriel Roubini, a professor at NYU’s Stern School of Business and CEO of Roubini Macro Associates, was Senior Economist for International Affairs in the White House’s Council of Economic Advisers during the Clinton Administration. He has worked for the International Monetary Fund, the US Federal Reserve, and the World Bank.

 

 

Harapan entering a grey area, a year before 2020


December 26, 2018

Harapan entering a grey area, a year before 2020

 

 

Opinion  |  by Phar Kim Beng

COMMENT | As I write this, Malaysia, as governed by Pakatan Harapan, is entering both a festive occasion – marked by Christmas and the New Year – and a festering one too. There are five telltale signs of the latter:

  • The tragic death of firefighter Muhammad Adib Mohd Kassim in the Seafield temple riots.
  • The 55,000 who gathered in Kuala Lumpur for the rally against the International Convention on the Elimination of All Forms of Racial Discrimination (Icerd).
  • Authorities seemingly forgetting about M Indira Gandhi’s missing daughter, and about Teoh Beng Hock’s death nearly ten years ago.
  • Close to 15 percent of Malaysia’ population will be above 60 years of age by 2023.
  • About 38,000 Felda settlers getting cost of living aid  and deposits for replanting.

In any one of the above, Harapan has at best either been silent, or belatedly proactive. Meanwhile, the world continues to change in five ways:

  • US President Donald Trump deciding on two simultaneous withdrawals from Syria and Afghanistan, signalling the end of American presence in two of the most conflict-prone regions in the world.
  • Russia staying quiet on the pullout of American troops, although this strategic withdrawal is akin to the collapse of the Berlin Wall.
  • Islamic State and the Taliban also staying quiet, suggesting a deeper motivation to push deeper into the Western world, or perhaps Asia, to wreak more havoc;
  • China’s One Belt, One Road initiative, which appeared to be all but irreversible, has been challenged by the Quad (United States, Japan, Australia and India).
  • Japan, one of the key powers in the Indo-Pacific region, continuing to shrink in terms of population, thus further heightening its insecurity.

These are dangerous times. There are some quaint parallels: the elan of the Vietnam War, when Communist forces pushed forward from the north to south in 1975; the fall of Kabul in 1989; the Russian incursion in Georgia in 2008; and the slow but organic militarisation of South China Sea from 2011 onwards when China, for the first time, referred to the area as its “core interest,” a term previously only reserved for Taiwan and Tibet.

But there is no telling if Harapan is aware of the whiplash effects of these world events. Political scientist Arthur Stein once warned of the importance of “relative gains” in international relations, wherein all great powers see gains and losses in zero-sum terms.

Granted, Malaysia has a foreign and defence policy that seems to be geared towards the centrality of ASEAN. But there is no telling if it wants to adjust to a post-US-Japanese world and the emerging Sino-Russian world order.

East Asia is entering this post-US-Japanese world. The US had always made it a point to keep Tokyo informed of any dramatic moves.

But now, at the speed of a tweet, Trump proceeded to announce the withdrawal of the US from the theater of the Middle East and South Asia, without notifying its staunchest East Asian allies Japan and South Korea.

Japan got its first taste of the ‘Nixon shock’ when the then-US president announced his plan to visit China in 1971, before Nixon announced his New Economic Programme, which included abandoning the gold standard.

The country would be shocked again when it received no thanks from Sabah Al-Ahmad Al-Jaber Al-Sabah of Kuwait for its financial contribution to Operation Desert Storm led by then-president George Bush.

What Trump did in recent weeks must constitute a third shock for Japan – a major ally pulling out of two regions at the same time, even with the opposition of outgoing Secretary of Defense James Mattis.

By pulling out of Syria and Afghanistan, Japan must be reeling from the fear that its security relationship with Washington can be subject to the same forces that catapulted Trump to power – populism and the American far right.

China and Russia must also be smiling in glee, with the American admission of the impossibility of conducting simultaneous conflicts in two regions.

Malaysia is entering a world of uncertain geopolitical realities and flux.

What adds to the instability is the fact that it is ruled by a new coalition of four parties now beset by infighting – and one still due for a possibly messy transition at the top.

Prime Minister Dr Mahathir Mohamad still looks set to hands over the reins to Anwar Ibrahim, although there are signs that things are less than rosy behind the scenes – such as when the daughter of the latter quit her posts in government.

The new year seems likely to put Malaysia in a pinch as it looks ahead to 2020.


PHAR KIM BENG is a multiple award-winning head teaching fellow on China and the Cultural Revolution at Harvard University.

The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.

 

 


December 25, 2018

Apocalypse Trump

by

https://www.project-syndicate.org/commentary/trump-syria-withdrawal-mattis-shutdown-by-elizabeth-drew-2018-12

With no compromise in sight to end the federal government shutdown, and no one left in President Donald Trump’s cabinet who can restrain him, Americans and their allies are staring into the abyss that has been looming since the 2016 election.

 

WASHINGTON, DC – For those who hadn’t yet figured it out, the price of having a US president who disdains expert opinion and who is impulsive, mendacious, not very smart, disturbed, uninformed, incurious, incompetent, intemperate, corrupt, and a poor negotiator became irrefutably clear in recent days. Three large developments from last Wednesday through Saturday unnerved even some of Donald Trump’s Republican protectors, who had rationalized that, after all, he had cut taxes (mainly on the rich and corporations) and put two conservatives on the Supreme Court bench. But the dangers of having such a person in the Oval Office were now becoming harder to ignore.

All three big events were alarming, and on a bipartisan basis: each was damaging to US national interests, and each was avoidable. Worse, because they came in rapid succession, they created the sense that now (as opposed to previous alarms) the Trump presidency was truly spinning out of control.

On the morning of Wednesday, December 19, Trump tweeted that ISIS had been defeated and that the US would, therefore, withdraw its troops from Syria. The decision came as a bolt from the blue for all but a small number of government officials – every one of whom had tried to dissuade him. Key members of Congress hadn’t been informed, much less consulted; nor had America’s allies, some of whose troops have been dependent on the presence of the US military. Major foreign policy decisions simply aren’t made that way: allies are consulted beforehand; relevant congressional figures are at least informed before any such announcement. Such precautions are about more than good manners: an administration might learn something as it consults and informs.

The decision was immediately and widely denounced. Trump’s usual Senate ally, Lindsey Graham, said, “ISIS has been dealt a severe blow but are not defeated. If there has been a decision to withdraw our forces in Syria, the likelihood of their return goes up dramatically.” The withdrawal, to begin immediately, abandons the Kurds, whom the US had been protecting from Turkey, and preempted a planned joint attack on ISIS. The withdrawal leaves Syria to the mercies of Bashar al-Assad, Russia (Assad’s patron), and Iran.

The only foreign leaders who welcomed the decision were Turkey’s authoritarian leader, Recep Tayyip Erdoğan, and Russian President Vladimir Putin. It later emerged that Erdoğan had persuaded Trump, who had said earlier, as a general proposition, that he wanted to withdraw US troops from Syria, to do so). Then came the news that Trump had also decided – again with scant consultation – to withdraw half the US troops in Afghanistan, despite the US being in the midst of negotiations with the Taliban.

The announcement of the sudden withdrawal from Syria was too much for defense secretary James Mattis, the most respected member of Trump’s cabinet – though it was far from the only provocation. On Thursday, Mattis, widely seen as the only hope for reining in Trump’s most dangerous impulses, stunned almost everyone by resigning. His eloquent resignation letter made clear that he objected not just to the Syrian blunder, but to a pattern of behavior: Trump’s confusion of allies and opponents; his willingness to abandon friends, such as the Kurds; and his trashing of alliances, such as NATO. Mattis’s friends explained in television interviews that what most troubled the retired four-star Marine general and defense intellectual was not just that he could no longer affect policy, but also that his remaining in the cabinet was taken as an affirmation of Trump, a position he could no longer bear.

Even that doughty loyalist, Senate Majority Leader Mitch McConnell, issued a statement on Thursday afternoon that he was “distressed” by the departure of Mattis (a significant sign, many believe, of McConnell’s private worry about Trump’s effect on the Republican Party.) Members of Congress expressed outright fear of a Trump presidency without any guardrails.

The list of departures from Trump’s administration is unprecedentedly long. Though some were forced out for blatant corruption (and shouldn’t have been hired in the first place), others have been fired because Trump has turned against them, and some left because of the president’s abusive treatment. He screams at subordinates at will and scapegoats them with abandon. At first, Trump treated Mattis with respect and even some affection; but he gradually tired of his most distinguished cabinet member’s almost across-the-board disagreement with his policies.

So fickle are Trump’s loyalties that he reportedly “soured” on his third chief of staff before his pick had even started in the position. To fill the job, which no one else seemed to want, Trump had turned to Mick Mulvaney, a conservative former congressman who had already held two high government positions simultaneously. Mulvaney, it turned out, had said in a televised debate during the 2016 election that he would vote for Trump over Hillary Clinton, even though Trump is “a terrible human being.”

Then, at midnight on Friday, a large part of the federal government shut down because Trump had been seeking a fight over the refusal of the Congress (albeit Republican-controlled) to spend billions of dollars to fund his campaign promise to build a wall across the long US-Mexico border. (Trump’s midterm election stunt of ordering troops to the border, purportedly to fend off approaching immigrants from Central America, had deeply rankled Mattis.)

The wall is very unpopular among the public, and only Trump’s most devoted followers view it as the answer to illegal immigration (or drug smuggling). But by using it to cultivate his political base – at most around 35% of the electorate – Trump could corner himself. In a televised White House meeting, he fell into a trap set by Democratic leaders by angrily insisting he would be “proud” to own a government  shutdown if he couldn’t get billions to fund at least part of the wall. Under strong pressure from right-wing media figures to keep his promise, Trump made and abandoned budget deals until time ran out.

So, just before Christmas, hundreds of thousands of federal workers – real people all over the country with bills to pay – were either furloughed or forced to work without knowing when they would be paid. And Trump is now a hostage in the White House, because even he understands that it would be terrible “optics” to be seen playing golf and hobnobbing with his rich friends at his Palm Beach estate while, just before Christmas, government workers were idled.

But while Trump must figure out how to climb down from his fanciful wall, so far he has ratcheted up his pettiness, removing Mattis two months ahead of schedule and tweeting insults to politicians who have criticized his recent blunders. His mood is reportedly fouler than ever, and the holiday season has become suffused with an increased sense of danger emanating from the White House.

Elizabeth Drew is a Washington-based journalist and the author, most recently, of Washington Journal: Reporting Watergate and Richard Nixon’s Downfall.

Trump’s uncanny political instincts and his ruthless “amorality”—A Formidable Challenge


October 28, 2018

Trump’s uncanny political instincts and his ruthless “amorality”—A Formidable  Challenge to Blue Democrats.

by Dr. Fareed Zakaria

ttps://fareedzakaria.com/columns/2018/10/25/trump-owns-the-bloody-crossroads-of-american-politics

Image result for Trump Vs Blue Democrats

“Democrats create mobs, Republicans create jobs” has become a rallying cry for Republicans ahead of the midterms

For those who believe that President Trump is a clownish know-nothing who somehow tapped into the mood of the electorate, or just got lucky in 2016, the last month has been instructive. Trump has demonstrated uncanny political instincts.  When combined with his ruthless “amorality” — a term used by one of his own senior officials in an anonymous New York Times op-ed — he presents a formidable challenge to his opponents.

Trump faces a familiar landscape. The party that holds the White House traditionally has low turnout and does badly in the midterm elections. But rather than accept this as inevitable, Trump has been aggressively trying to beat the odds. He’s turned what are usually disparate races in the House and Senate into a single national election, fought on an agenda that he has defined.

Item one on his agenda is immigration. The reason is obvious: The issue rouses his voters like no other. Trump campaigns relentlessly on it, making the false accusation that if the Democrats win, they will open up the borders and let everyone in.

PHOTO: President Donald Trump along with Republican Senator from Wyoming John Barrasso (L) and Republican Senate Majority Leader from Kentucky Mitch McConnell (R), walk to a Republican Senate luncheon in the U.S. Capitol on Nov. 28 2017.

He has used the current caravan of Central American migrants to highlight his case against the Democrats. Since Republicans are also still highly motivated by fears of terrorism, Trump threw in the accusation that there are “Middle Easterners” in the caravan. (First, there is no evidence for that claim, which Trump himself even admits; and second, if there were, it is an ugly slur to imply that any Middle Easterner is a terrorist.) As the media eagerly fact-checks his rhetoric, Trump seems well aware that they are incidentally repeating his claims and reinforcing the suspicion and fear in the public’s mind.

The second way Trump has turned the midterms into a national vote is by raising the specter of impeachment. Nothing would anger his base more than the notion of an elitist conspiracy (of lawyers, journalists and judges) determined to undo the results of the 2016 election. White House press secretary Sarah Sanders declared that impeachment is “the only message [the Democrats] seem to have going into the midterms.”

Trump’s midterm strategy was foreshadowed by Stephen K. Bannon several months ago, when he explained, in an interview with me on CNN, that the Republicans needed to turn the midterms into a referendum on Trump. “Trump’s second presidential race will be on Nov. 6 of this year,” Bannon said. “He’s on the ballot, and we’re going to have an up-or-down vote.”

How does one counter this campaign? Many Democrats angrily maintain that they do not, in fact, favor open borders and impeachment — that their positions are more nuanced. But when you are explaining nuance in politics, you are losing. The Democratic Party has not found a way to go on the offensive and get Trump to explain that he has, in fact, a more complicated position on any given topic.

But there is a substantive problem in addition to one of style and tactics. The Democratic Party is insisting that recent election results are an unmistakable sign that it needs to change course and become far more populist on economics. But the data clearly show that the American public is very comfortable with where the party is on issues such as health care and inequality.

The challenge for the Democrats is a set of cultural issues — chiefly immigration, but also things such as transgender bathroom laws and respecting the flag — on which a key group of Americans thinks the Democrats are out of touch. An excellent study by the Democracy Fund found that people who had previously supported Barack Obama and then voted for Trump in 2016 (a crucial segment that Democrats could win back) agreed with the Democrats on almost all economic issues but disagreed with the party on immigration and other cultural matters.

Put simply, the study makes clear that the challenge for the Democratic Party politically is not whether it can move left economically but whether it can move right on culture. I say this as someone who agrees with the Democrats on almost every one of these cultural issues. But a large national party must demonstrate that it can accommodate some people who disagree with it on some issues. Doing this without abandoning one’s core principles is a challenge, but it is a challenge Democrats will have to embrace if they seek a durable governing majority.

Eventually, the electorate will be more young and diverse, but in the meantime, the Republican Party is utterly dominant in American politics because it owns the bloody crossroads where culture and politics meet.

 (c) 2018, Washington Post Writers Group

Safeguarding A Rules-based Trading System against America First Trade Economics


October 16, 2018

Safeguarding A Rules-based Trading System against America First Trade Economics

by Dr. Mari Pangestu, Universitas Indonesia

http://www.eastasiaforum.org

 

Image result for Dr. Mari Pangestu

“Without concerted effort and a coalition of willing leadership, including from the EU and East Asia, the future of the rules-based trading system will remain under threat.”–Dr. Mari Elka Pangestu

Despite expectations that the US Federal Reserve would raise interest rates, capital flows to the United States have led to the appreciation of the US dollar against most major currencies.

The hardest hit countries are Argentina and Turkey, which are experiencing fiscal issues complicated by their political situations. Brazil, South Africa and the emerging countries in Asia have also been affected — albeit at a lower rate of depreciation of their currencies in the 10 to 12 per cent range. Even Australia and China have experienced depreciation of around 8 per cent and 5 per cent respectively.

The level of depreciation experienced by different economies reflects how investors perceive their different fundamental macroeconomic conditions, especially the level of their current account and fiscal deficits and policy outlooks.

Image result for Dr IMF's Christine Lagarde

The rising US dollar raises questions about the capacity of emerging economies to service their dollar-denominated debts and the vulnerabilities this could expose in their financial systems. Even if the current economic conditions point to a low potential for contagion from Argentina and Turkey, IMF Managing Director Christine Lagarde recently warned that ‘these things could change rapidly’. The uncertainty that already exists is a clear and present danger.

The uncertainty in the world economy has been increasing since Brexit and the election of President Trump in 2016, and in 2017 as the United States left the Trans-Pacific Partnership and announced many threats to impose trade restrictions. This uncertainty has heightened since January 2018 when US President Donald Trump made good on his threats to remedy bilateral trade deficits — what he sees as ‘unfair trade’ practices against the United States — by imposing tariffs on imported solar panels and washing machines, followed by aluminium and steel.

Since March, the greatest uncertainty has been from the brewing tit for tat trade conflict between the United States and China, which started with the imposition of 25 per cent tariffs on US$50 billion worth of China’s exports to the United States. China retaliated with the same sized tariffs on the same amount of trade from the United States. Trump then escalated the trade war further in September with the announcement of 10 per cent tariffs on US$200 billion worth of China’s exports to the United States.

The US–China trade conflict and the uncertainty surrounding it is expected to have knock on effects on global trade and investment flows. The impact of the reduction in China’s exports to the United States on China’s growth will reduce China’s imports, which in turn will impact the many countries that China has become a major trading partner for.

This means that China and other countries facing US trade restrictions will look for new markets for their goods. The situation has already led some countries to impose restrictions or initiate trade remedy investigations, for instance on steel. This uncertainty has and will continue to influence trade and investment, as businesses evaluate how the increased restrictions will affect their supply chains.

It is too early to tell how large the disruption will be, as it is not easy to dismantle supply chains. But the costs down the line could be great as businesses re-evaluate their trade and investment decisions to insulate themselves from tariffs rather than to maximise their competitiveness.

The most concerning aspect of all this is that, after 75 years of being its greatest advocate, the United States is now the biggest threat to the future of the rules-based trading system that has provided predictability and fairness in the way the world engages in trade. There is no clear light at the end of the tunnel.

The key question is: what is Trump’s intention? Is it to change the rules of the game to benefit the United States and address China’s ‘non-market-oriented policies’ or is it just anti-trade and America First? Assuming it is the former, there are at least three important responses needed.

First is safeguarding the stability of the World Trade Organization (WTO) as the overarching framework to provide predictability, fairness and stability. To this end, it is vital that the WTO dispute settlement mechanism continues to operate. The test case is the Chinese and EU case against US steel and aluminium tariffs and getting past the blocking of panel judge nominations by the United States.

Ensuring that the United States does not use blunt unilateral instruments to address its concerns also means that reforms to the WTO rule book are needed. More must be done to address concerns around intellectual property rights, investment, the environment, labour, competition policy, subsidies, tax, digital data and the treatment of developing countries.

Second, the process of opening-up must continue, with or without the United States. The Comprehensive and Progressive Agreement for Trans-Pacific Partnership is a good start. And it is of the utmost importance that the Regional Comprehensive Economic Partnership negotiations are concluded in November this year. These are all important processes to signal the continued commitment of East Asia to expanding markets and fostering flows of trade and investment.

Third, and what most will agree is the most important process, is unilateral reforms. Given increased global uncertainty and limited policy space for fiscal stimulus, structural reforms are a must for East Asian countries, especially China. These range from trade and investment reforms, as well as reforms related to competition policy, intellectual property, the role of state-owned enterprises and sustainability. As in the past, unilateral reforms are more successfully undertaken when there is peer pressure and benchmarking from international commitments.

Without concerted effort and a coalition of willing leadership, including from the EU and East Asia, the future of the rules-based trading system will remain under threat.

Dr. Mari Pangestu is former Indonesian trade minister and Professor at the University of Indonesia.

This article appeared in the most recent edition of East Asia Forum Quarterly, ‘Asian crisis, ready or not’.